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Hong Kong to increase land supply amid soaring house prices
October 13, 2010, Wednesday
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HONG Kong would increase land supply in response to market demand as property prices soared in the past year, Hong Kong Special Administrative Region Chief Executive Donald Tsang said today.
"Housing is currently the greatest concern of our people," Tsang said in his annual policy address at the city's 60-member Legislative Council, which was live broadcast to Hong Kong's 7 million people.
Policy address is the annual address by the Chief Executive of Hong Kong Special Administrative Region. Usually, it is addressed in October, on the opening of the city's Legislative Council.
Tsang said the city government's housing policy features three principles -- to help the low-income group by providing public rental housing, to supply land and minimize intervention in the property market, and to ensure sufficient land supply and provide quality infrastructure.
In September 2010, private residential property prices rose by 20 percent year on year in Hong Kong, according to the Hong Kong chief.
While since January of 2009, Hong Kong house prices had risen about a third, owing to exceedingly low mortgage interest rates, an influx of foreign capital and insufficient housing supply, which upset the city's residents. Hong Kong's housing price was one of the most expensive among the world's major cities.
The city government and property regulatory bodies had adopted a series of measures in their continuous efforts to cool down Hong Kong's sizzling property market.
"We should address the fundamentals by increasing land supply in response to market demand. We will create a land reserve,... to ensure that there will not be any shortage in housing land supply, " he told lawmakers.
Tsang admitted that Hong Kong's housing land had been in short supply over the past few years because of a number of challenges -- re-planning of southern Tseung Kwan O to lower its overall density, adopting "zero reclamation" for the new design of the Kai Tak Development, reviewing high-density development projects, and tackling various problems arising from statutory procedures.
He said the city government should think out of the box to review existing land uses and explore new land resources. "We have completed a study on industrial sites across the territory, and proposed to rezone about 30 hectares of land for residential use."
Tsang said the Hong Kong government would later consult the public on the proposal for reclamation on an appropriate scale outside the landmark Victoria Harbor to generate more land in the long run.
By the end of September this year, a total of eight sites had been sold, which altogether could provide some 4,700 flats, he said.
And if taking into account further sites made available through lease modifications and land exchanges, Tsang said an estimate of 61,000 first-hand private residential units would come on the market in the next three to four years.
According to Tsang, the average annual take-up rate of first- hand private residential flats in Hong Kong was 18,500 units in the past 10 years.
"To ensure a healthy and stable property market, in the next 10 years, on average land needs to be made available annually for some 20,000 private residential flats," he said.
Regarding the city's public rental housing, the Hong Kong chief said the Steering Committee on Housing Land Supply, led by Financial Secretary John Tsang, would ensure an adequate supply of land to produce about 15,000 flats each year, thus maintaining an average waiting time of three years.
To ensure rational allocation, the city's Housing Department will step up checks on tenants' household income and assets, he said.
As for suggestion to use proposed public-rental-housing sites to build Home Ownership Scheme flats, Tsang said any proposals that may undermine pledge to maintain the waiting time of three years for public rental housing are unacceptable.
The Home Ownership Scheme is a subsidized-sale public housing program managed by the Hong Kong Housing Authority.
It was instituted in the 1970s as part of the city's government policy for public housing in Hong Kong, to give the poor a chance to purchase as well as rent public housing from the government.
Under the scheme, the city's government sells apartment flats to eligible low-income residents at prices far below the overall market, with discounts usually between 30 and 40 percent, and also provides subsidies on the land value.
While public rental housing is the other common type of public housing estates, which is rented at discounted rates to low- income residents. Low-income eligibility criteria for public rental and subsidized-sale flats vary between families, the elderly and individual applicants.
Hong Kong's public housing is a set of mass housing program, through which the city government provides affordable housing for lower-income residents. It is a major component of housing in Hong Kong.
According to the 2006 census, 3.3 million HK residents or 48.8 percent of the city's then total population lived in rental or subsidized-sale public housing.
In breakdown, 31 percent lived in public rental housing, 17.1 percent lived in Housing Authority subsidized-sale flats and 0.7 percent lived in Housing Society subsidized-sale flats.
"Housing is currently the greatest concern of our people," Tsang said in his annual policy address at the city's 60-member Legislative Council, which was live broadcast to Hong Kong's 7 million people.
Policy address is the annual address by the Chief Executive of Hong Kong Special Administrative Region. Usually, it is addressed in October, on the opening of the city's Legislative Council.
Tsang said the city government's housing policy features three principles -- to help the low-income group by providing public rental housing, to supply land and minimize intervention in the property market, and to ensure sufficient land supply and provide quality infrastructure.
In September 2010, private residential property prices rose by 20 percent year on year in Hong Kong, according to the Hong Kong chief.
While since January of 2009, Hong Kong house prices had risen about a third, owing to exceedingly low mortgage interest rates, an influx of foreign capital and insufficient housing supply, which upset the city's residents. Hong Kong's housing price was one of the most expensive among the world's major cities.
The city government and property regulatory bodies had adopted a series of measures in their continuous efforts to cool down Hong Kong's sizzling property market.
"We should address the fundamentals by increasing land supply in response to market demand. We will create a land reserve,... to ensure that there will not be any shortage in housing land supply, " he told lawmakers.
Tsang admitted that Hong Kong's housing land had been in short supply over the past few years because of a number of challenges -- re-planning of southern Tseung Kwan O to lower its overall density, adopting "zero reclamation" for the new design of the Kai Tak Development, reviewing high-density development projects, and tackling various problems arising from statutory procedures.
He said the city government should think out of the box to review existing land uses and explore new land resources. "We have completed a study on industrial sites across the territory, and proposed to rezone about 30 hectares of land for residential use."
Tsang said the Hong Kong government would later consult the public on the proposal for reclamation on an appropriate scale outside the landmark Victoria Harbor to generate more land in the long run.
By the end of September this year, a total of eight sites had been sold, which altogether could provide some 4,700 flats, he said.
And if taking into account further sites made available through lease modifications and land exchanges, Tsang said an estimate of 61,000 first-hand private residential units would come on the market in the next three to four years.
According to Tsang, the average annual take-up rate of first- hand private residential flats in Hong Kong was 18,500 units in the past 10 years.
"To ensure a healthy and stable property market, in the next 10 years, on average land needs to be made available annually for some 20,000 private residential flats," he said.
Regarding the city's public rental housing, the Hong Kong chief said the Steering Committee on Housing Land Supply, led by Financial Secretary John Tsang, would ensure an adequate supply of land to produce about 15,000 flats each year, thus maintaining an average waiting time of three years.
To ensure rational allocation, the city's Housing Department will step up checks on tenants' household income and assets, he said.
As for suggestion to use proposed public-rental-housing sites to build Home Ownership Scheme flats, Tsang said any proposals that may undermine pledge to maintain the waiting time of three years for public rental housing are unacceptable.
The Home Ownership Scheme is a subsidized-sale public housing program managed by the Hong Kong Housing Authority.
It was instituted in the 1970s as part of the city's government policy for public housing in Hong Kong, to give the poor a chance to purchase as well as rent public housing from the government.
Under the scheme, the city's government sells apartment flats to eligible low-income residents at prices far below the overall market, with discounts usually between 30 and 40 percent, and also provides subsidies on the land value.
While public rental housing is the other common type of public housing estates, which is rented at discounted rates to low- income residents. Low-income eligibility criteria for public rental and subsidized-sale flats vary between families, the elderly and individual applicants.
Hong Kong's public housing is a set of mass housing program, through which the city government provides affordable housing for lower-income residents. It is a major component of housing in Hong Kong.
According to the 2006 census, 3.3 million HK residents or 48.8 percent of the city's then total population lived in rental or subsidized-sale public housing.
In breakdown, 31 percent lived in public rental housing, 17.1 percent lived in Housing Authority subsidized-sale flats and 0.7 percent lived in Housing Society subsidized-sale flats.
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